Brazilian oil & gas firm pulls the plug on FPSO acquisition from MODEC

Brazil’s oil and gas player Enauta has brought its purchase of a floating production, storage, and offloading (FPSO) unit to an untimely end. This decision to break off the acquisition deal for an FPSO owned by MV20, an affiliate of Japan’s MODEC, may hinder the Brazilian player’s portfolio expansion arranged with Petrobras for a set of oil and gas fields and associated infrastructure.  

Before December 2023 came to an end, Enauta disclosed a contract, valued at $48.5 million with $7.275 million paid on signing, to acquire the FPSO Cidade de Santos, which MODEC operates in the Uruguá and Tambaú fields. This FPSO has been on a charter contract with Petrobras since 2010.

The FPSO acquisition is linked to the Brazilian firm’s deal with Petrobras for the Uruguá and Tambaú oil and gas fields in the Santos Basin and a 178-kilometer natural gas pipeline connecting the production platform to the Mexilhão field’s natural gas infrastructure.

While explaining that it has notified MODEC of the contract termination regarding the procurement of the FPSO Cidade de Santos, Enauta claims that this provides for a 50% reimbursement of the amount disbursed at signing, approximately $3.6 million.

Given its move to cut short the process for the FPSO purchase and end the deal, the Brazilian player is engaged in discussions with Petrobras about the implications of this decision on the ongoing acquisitions of Uruguá and Tambaú oil and gas fields and the natural gas pipeline from these fields to Mexilhão field, where it connects to Route 1 pipeline.

Further information will be made available as the situation unfolds, depending on the progress and conclusion of these talks. In the meantime, Enauta also set the stage to get a hold of the entire stake held by QatarEnergy Brasil in the oil fields of Abalone, Ostra, and Argonauta, comprising the Parque das Conchas.

The Brazilian player is currently making headway in its merger with 3R Petroleum Óleo e Gás, a compatriot player, as two more conditions for the proposed business combination have been cleared out of the way.